Hongdou Co., Ltd. plans to transfer 68% of the equity of Hongri Wind Energy to Hongdou International at a transaction price of 7.48 million yuan

Producer: Sina Finance Listed Company Research Institute

Author: Hao

On April 16, Hongdou Co., Ltd. announced that it intends to transfer 68% of the equity of Wuxi Hongri Wind Energy Technology Co., Ltd. (hereinafter referred to as "Hongri Wind Energy") held by it to Jiangsu Hongdou International Development Co., Ltd. (hereinafter referred to as "Hongdou International") (subscribed capital contribution of 34 million yuan and paid-in capital of 7.48 million yuan), with a transaction price of 7.48 million yuan.

Since Hongdou shares and Hongdou International are both holding subsidiaries of Hongdou Group Co., Ltd. (hereinafter referred to as "Hongdou Group"), the above-mentioned equity transfer constitutes a connected transaction.

After the completion of this transaction, Hongdou shares no longer hold the equity of Hongri Wind Energy, which is only more than a year after the company announced cross-border new energy.

In 2022, when the new energy industry is in full swing, Hongdou Co., Ltd. will cross over from the main clothing business into new energy, and get involved in solid-state batteries, wind power and energy storage businesses, but since then, the company's new energy business has made slow progress, and it will only achieve a revenue of more than 2 million yuan in 2023. In this period of more than a year, the share price of Hongdou shares first doubled and then halved, during which the major shareholder Hongdou Group realized the realization of part of the equity through direct reduction and bulk transfer.

In addition to the loss-making assets of the listed company, Hongdou Group also acquired the printing and dyeing business of Hongdou shares and the equity of Su Mintou. In the past three and a half years, the total net profit attributable to the parent company is a loss, the debt ratio has been more than 60% for a long time, the interest-bearing liabilities are more than 16 billion and are on the rise, the mortgage and restricted funds are about 20 billion, and 80% of the shares of the two listed companies held by it have also been pledged.

Cross-border new energy withdrew again in less than two years, and major shareholders reduced their holdings and transferred part of their shares

A few days ago, Hongdou announced that it intends to transfer 68% of the shares of Hongri Wind Energy to Hongdou International, a major shareholder of Hongdou Group, at a consideration of 7.68 million yuan.

Hongdou shares said that this equity transfer is conducive to the company's focus on the main business of men's clothing, and has positive significance for reducing investment risks and improving the company's operational competitiveness. However, the divestment of Hongri Wind Energy to Hongdou Group is less than two years after the company invested in the establishment of Hongri Wind Energy.

In May 2022, Hongri Wind Energy was jointly initiated and established by Hongdou Co., Ltd., its affiliated companies Hongdou Group and Jiangsu Hongri New Energy Co., Ltd., thus crossing over to the lithium battery track that was in the hot market at that time.

In July of the same year, Hongdou Co., Ltd. announced that Hongri Wind Energy planned to cooperate with Super One Power (Chengdu) New Energy Technology Co., Ltd. (hereinafter referred to as "Super One Power") to build a 3GW high-power solid-state lithium battery intelligent manufacturing project in Baihaizi District, Jining District, Ulanqab City, with a total investment of about 1.5 billion yuan and an estimated annual sales revenue of 4.5 billion yuan.

Hongdou Co., Ltd. said that through the establishment and holding of Hongri Wind Energy, it is conducive to the company to further grasp the development opportunities of the new energy market, accelerate the layout of green investment in new energy, and help the company's long-term development.

However, the development of Red Sun Wind Energy's business has not been smooth since then.

In 2022, Hongri Wind Energy did not generate revenue, with a net profit of -2.93 million yuan, of which the largest expenditure item was management expenses, which was 2.86 million yuan, and in 2023, Hongri Wind Energy's revenue was only 2.39 million yuan, with a net profit of -5.03 million yuan, and the management expenses of the year reached 5.84 million yuan.

The progress of Hongdou's new energy business is not effective, and the company's stock price has also been on a roller coaster. In May 2022, that is, when Hongri Wind Energy was first established, the share price of Hongdou shares was around 3 yuan/share, and 4 months later, the company's stock price exceeded 6 yuan/share at the highest, and since then it has been in a downward trend, and the current stock price has fallen back to only 2.5 yuan/share.

It is worth noting that in the more than a year since the share price of Hongdou shares doubled to halved, the company's major shareholder Hongdou Group has also made frequent moves.

Wind data shows that from June to August 2022, Hongdou Group sold the equity of Hongdou shares several times through direct reduction and agreement transfer, of which 46.017 million shares were directly reduced and 138 million shares were transferred to Wuxi Wenzhi Investment Partnership (Limited Partnership), and the shareholding ratio decreased from 68.03% to 60.04%.

In June 2023, Hongdou Group reduced its holdings of 30 million shares of Hongdou again, and its shareholding ratio also decreased from 60.04% to 58.81%. In less than two years, the proportion of shares held by Hongdou Group has dropped by nearly 10 percentage points, and hundreds of millions of yuan worth of equity have been realized.

Major shareholders take over several assets of listed companies and face greater performance and financial pressure

In fact, in addition to the equity transaction of Hongri Wind Energy, Hongdou Group and its affiliates have also taken over other assets of Hongdou shares.

In December 2023, Hongdou Co., Ltd. announced that it intends to sell assets related to its printing and dyeing business, including current assets, fixed assets, intangible assets, etc., to a related party, Nanguo Hongdou Holdings Co., Ltd., at a transaction price of 78.4551 million yuan.

Hongdou shares said that the underlying assets to be sold in this transaction have been operating poorly in recent years, and the sale of printing and dyeing business is conducive to optimizing the company's asset structure and improving the overall asset operation efficiency.

In November 2019, Hongdou also announced that it planned to transfer 6% of the equity of Jiangsu Private Investment Holding Co., Ltd. (hereinafter referred to as "Su Mintou") held by it to the controlling shareholder Hongdou Group, with a transaction price of 318 million yuan.

In order to optimize the company's asset structure and promote the company's long-term and steady development, it decided to transfer the equity of Su Mintou, which is in line with the long-term interests of the company and all shareholders.

It is not difficult to see that in order to assist Hongdou to optimize the asset structure and improve operational efficiency, Hongdou Group has given great support to listed companies. However, Hongdou Group itself is also facing greater performance and financial pressure.

According to the latest medium-term note prospectus of Hongdou Group, from 2020 to 2022 and the first half of 2023, the total operating income of Hongdou Group will be 19.053 billion, 20.219 billion, 19.338 billion and 11.994 billion respectively, and the net profit attributable to the parent company will be 96 million, 117 million, -277 million and 45 million respectively, and the net profit attributable to the parent company in the past three and a half years will accumulate as a loss. Due to the large profit and loss of minority shareholders, the net profit attributable to the parent of Hongdou Group is much lower than the net profit in the same period.

In terms of finance, from 2020 to the end of 2022 and at the end of June 2023, the asset-liability ratio of Hongdou Group was 62.36%, 64.95%, 63.65% and 61.34% respectively, which was generally at a high level of more than 60%, and the total interest-bearing liabilities were 13.064 billion yuan, 13.032 billion yuan, 16.835 billion yuan and 16.260 billion yuan respectively, accounting for 57.20%, 52.78%, 60.57% and 64.62% of the current liabilities in the same period , the proportion of the overall trend is rising.

As of the end of June 2023, the balance of bank loans obtained by Hongdou Group by mortgage and other means was 20.379 billion yuan, and the book value of restricted assets was 18.327 billion yuan, accounting for 93.18% of the current net assets.

Judging from the share pledge, Hongdou Group's capital does not seem to be abundant.

Wind data shows that Hongdou Group has pledged 1.081 billion shares of Hongdou, accounting for about 80% of its holdings, and Wuxi Wenzhi Investment Partnership (Limited Partnership), the second largest shareholder of Hongdou shares, has also pledged 78 million shares of Hongdou shares, accounting for 63% of its holdings.

In addition, Hongdou Group has also pledged 526 million shares of GM's shares, another listed company under its control, accounting for 80% of its holdings, and Wuxi Hongdou International Investment Co., Ltd., the second largest shareholder of GM, has also pledged 19 million shares, accounting for 79% of its holdings.